WI-FI In The Warehouse

BY Brendan O'Brien

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A wireless Internet network, or WI-FI, can be a cost effective way for jan/san distributors to make their warehouse processes more efficient, by allowing for universal access to real-time inventory information and eliminating counting and picking errors.

WI-FI is a technology that allows computers and mobile devices to communicate with each other and the Internet without being connected by wires. However, in a warehouse, WI-FI is used as a system of small boxes that transmit signals to and from computers and scanners. The Internet access, from virtually anywhere in the warehouse, allows distributors to pick orders faster and more accurately, which results in better customer service.

Benefits

Before the introduction of WI-FI, warehouse staff would have to manually count and pick orders based on what was on an order form or an inventory list. This process is time-consuming and prone to cause errors, resulting in unhappy customers. But now, WI-FI can be integrated with a distributor's enterprise resource planning (ERP) system, allowing users to track all aspects of the warehouse, including receiving, picking and inventory counts.

"Primarily the biggest positives that we have seen since we went live with the system is cutting down on errors and streamlining warehouse processes," says Jonathan Soon, vice president of operations and CFO at Royal Corp. in Santa Fe Springs, Calif., a company that installed a WI-FI system in its 80,000 square foot warehouse about two years ago. "Most importantly, the end result is we want our customers to be happy and they now get the right orders at the right time."

WI-FI systems typically use hand-held scanners or voice directed headsets for order picking. Since the device, along with the software and barcodes are doing all the communicating, there is less chance for operator error.

"A lot of warehouse management software was designed really to reduce a lot of the errors in picking and counting in the warehouse operation. That was the original intent back in the early 90s," says Jason Bader, owner of The Distribution Team, Inc., a consulting firm in Portland, Ore. "When people moved to a warehouse management software package, they were improving the shipping accuracy. They just don't have any mistakes. They don't pull the wrong product."

As an added benefit, to operate picking equipment such as scanners and headsets, the employees' primary language doesn't even need to be English, says Soon.

These systems also allow for real-time tracking of every piece of inventory arriving, resting or leaving a warehouse and cycle counting without halting the moving of the inventory. WI-FI technology eliminates lag time caused by information slowly moving through the enterprise, typically in the form of a copy of a list, a pick ticket or invoice that is manually entered into an ERP system.

"A lot of unnecessary manual communication has been eliminated by the system updating in real-time," Soon says.

The real-time nature of WI-FI reduces inventory mistakes. Distributors tend to overstock items to ensure they will meet customer expectations. But, with real-time inventory levels, distributors know exactly how much product is on the shelves and instead of buying unneeded stock, that money can be spent elsewhere, loosening tight cash flows. On the flip side, there's no need to worry about understocking either, and not being able to service a customer.

Overcoming Challenges

One of the challenges to installing WI-FI in distribution warehouses is that the steel shelving and mass amounts of cardboard boxes often interferes with the Internet signal. To rectify this problem, the WI-FI system should be built with plenty of "redundancy" or signal overlap.

"This is so you would not lose the signal going from one receiver to another receiver, you (should) have enough (overlap) so it would pick it up," says Pat Haray, director of operations Eastern Bag and Paper, Milford, Conn.

The company installed WI-FI in its 150,000-square-foot distribution center to accommodate its voice picking application. Haray recommends distributors hire a consultant to come out to the warehouse to determine how many receivers will be needed.

When installing WI-FI in a warehouse or a distribution center, it is also a good idea to connect the facility's offices at the same time so that salespeople and other non-warehouse employees can tap into the Internet as well.

"We have a lot of salespeople with laptops and they could come in and hook into the system. We don't need desktops all over the place," Haray says.

There is an inherit drawback, however, to allowing salespeople the ability to roam the warehouse and storage facilities, according to Bader.

"I am a huge opponent to having those guys walking into a warehouse," Bader says. "Salespeople will take samples and (inventory) without regard for what the system believes is actually there and screwing stuff up bad. Frankly, most of the people that have problems with inventory accuracy and management, a lot of it is a result of the wrong fingers being in the warehouse."

Another drawback to the wireless technology in the warehouse is the fact that it can let workers surf the Web with the mobile devices. If not regulated by firewalls and company policies, employees casually surfing the Web could drag down the system and eat into productivity. In addition, if the WI-FI system goes down the entire warehouse would have to go back to manually counting and picking, says Soon.

"That would be a big challenge because everyone is used to electronically updating everything," he adds. "We have a lot of backups and we had to buy additional scanners in case the scanners were to malfunction. Otherwise, you have a user that is not able to function."

However, if used properly, the hand-held devices can act as personal computers, allowing workers access to applications, documents and other vital information from practically anywhere in the warehouse.

Cost Concerns

WI-FI is an outgrowth of radio frequency technology. Radio frequency allows warehouse workers to scan products with gun-type devices. About four or five years ago, some warehouse management packages began allowing for the use of wireless technology. The advantage warehouse managers found, which still holds true today, is WI-FI is much easier to install and maintain than its radio frequency predecessor, says Bader.

The cost for a wireless system with software installed is about $50,000 for each location, making it a serious investment for any distributor. One of the large factors to how much a system will cost is the number of hand-held scanners or devices that are to be used throughout the facility. For example, if a warehouse needs six devices to function, it will be more expensive that one that needs only three devices. The devices typically cost about $2,500 a piece, says Bader.

When shopping for a wireless package, a distributor should look at exactly what they need and not be swayed by the bells and whistles that may be offered. The basic functions, such as picking orders, cycle counting, shipping, receiving and product movement from bin to bin, is all that a distributor typically needs, Bader says.

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